The Obama administration is merely the farcial end of a bi-partisan decades long holiday from fiscal sanity by which we have amassed a matterhorn of public debt we have no way of repaying. The fiscal projections of the Congressional Budget Office and the White House make sombre reading. The tax protests of last week are a reaction to what is no longer fiscal policy but obvious fiscal lunacy. Either we turn away from this madness or our economy will eventually hit a wall of governmental debt and the whole house of credit cards will come crashing down.

A quote from Founding Father John Adams is more relevant today than when he wrote it:

“All the perplexities, confusion and distress in America arise, not from defects in their Constitution or Confederation, not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit and circulation.”

“Either we turn away from this madness or our ecnomy will eventually hit a wall of governmental debt and the whole house of credit cards will come crashing down.”

I think we’re already getting there. This wretchedly regrettable crisis we’re currently in is merely but one of its manifestations:

“The root cause of today’s crisis lies not in the housing market but in America’s foreign debt. Over the past four years the U.S. private sector has borrowed an astonishing $3 trillion from the rest of the world. The money, directly and indirectly, came from countries such as China, Germany, Japan, and Saudi Arabia, which ran huge trade surpluses with America. Foreign investors trusted their funds to U.S. financial institutions, which used much of the money for mortgage loans.

But American families took on a lot more debt than they could comfortably afford. Now no one is sure how much of that towering sum the U.S. is going to pay back — and all the uncertainty is roiling the financial markets.

SINCE MID-2004, AMERICAN HOUSEHOLDS HAVE TAKEN ON A BIT MORE THAN $3 TRILLION IN MORTGAGE DEBT.”

SOURCE: Chief Economist Michael Mandel

— and —

“Experts say that even when the current credit crunch eases, the nation may finally have maxed out its reliance on borrowed cash. Today’s crisis is a warning sign, they say, that consumers could be facing long-term adjustments in the way they finance their everyday lives.

‘I think we’re undergoing a fundamental shift from living on borrowed money to one where living within your means, saving and investing for the future, comes back into vogue,’ said Greg McBride, senior analyst at Bankrate.com. ‘THIS ENTIRE CREDIT CRUNCH IS A WAKEUP CALL TO ANYBODY WHO WAS ATTEMPTING TO BORROW THEIR WAY TO PROSPERITY.’

AMERICANS ARE MORE RELIANT ON DEBT THEN EVER BEFORE.

The portion of disposable income that U.S. families devote to debt hit an all-time high in the second half of last year, topping 14 percent, figures from the Federal Reserve show. When other fixed obligations — like car lease payments and homeowner’s insurance — are added in, about one of every five household dollars is now claimed by bills.

The credit card industry lobbied heavily in 2005 to tighten bankruptcy laws to make it more difficult for consumers to seek court protection and shed responsibility for paying off debt. But in a sign of just how much households have become dependent on borrowing, the average amount of credit card debt discharged in Chapter 7 bankruptcy filings has tripled — to $61,000 per person — from what it was before the law was passed.

‘We are going to have to cut back,’ said Dean Baker of the Center for Economic and Policy Research, a Washington, D.C. thinktank. ‘We’ve really been living beyond our means.'”